Increased cash consideration to US$13.00 per
shareAmendment to certain terms of the ArrangementAnnual and
Special Meeting of Shareholders to be held on Friday, June 6,
2014Wednesday, June 4, 2014 proxy voting deadline
Nordion Inc. (TSX:NDN) (NYSE:NDZ) announced today that it has
entered into a second amendment (the “Second Amendment”) to the
previously announced definitive agreement with Sterigenics (as
amended, the “Arrangement Agreement”) providing that, among other
things, shareholders of Nordion will now be entitled to a cash
consideration of US$13.00 per share (the “Increased
Consideration”) upon closing of the proposed acquisition by
Sterigenics of all the issued and outstanding common shares of
Nordion (the “Arrangement”).
Although a clear majority of Nordion shareholders supported
Sterigenics’ all-cash acquisition proposal at US$12.25 per share,
there did not appear to be sufficient shareholder support to
approve the transaction based on voting results available following
the May 30, 2014 proxy voting deadline (the “Proxy Voting
Deadline”). As of the Proxy Voting Deadline, approximately 72.7% of
all outstanding shares have been voted by proxy on the Arrangement
resolution. Approximately 65.2% of the shares voted are in favour
of the Arrangement and approximately 34.8% of the shares voted are
against the Arrangement resolution. The Arrangement resolution
requires the approval of 66 2/3% of the votes cast by such
shareholders. In an effort to secure the necessary shareholder
support for the Arrangement resolution, Sterigenics has increased
the cash consideration per share from US$12.25 to US$13.00 per
share.
On May 30, 2014, three days after the originally scheduled
shareholder meeting, Nordion received an unsolicited written
acquisition proposal from a third party for the acquisition of all
the issued and outstanding common shares of Nordion for a price of
US$12.50 per share payable in cash (the “Revised Unsolicited
Proposal”). The third party is the same party that made an
unsolicited written acquisition proposal on April 25, 2014 (the
“Initial Unsolicited Proposal”), which was publicly announced by
Nordion on May 5, 2014. The third party had previously participated
in Nordion’s strategic review process and is referred to as Party A
in Nordion’s management information circular dated April 22, 2014
(the “Circular”). As was the case for the Initial Unsolicited
Proposal, the Revised Unsolicited Proposal contained a comfort
letter from debt financing sources, however it did not have the
committed debt or equity financing to fund the acquisition and was
subject to other conditionality, including approval by the
shareholders of Party A. The Revised Unsolicited Offer did not
include any greater commitment as to debt or equity financing
sources, nor any less conditionality, than the Initial Unsolicited
Proposal delivered in April to the Company.
On the evening of May 30, 2014, the Board, acting on the
unanimous recommendation of the Special Committee comprised solely
of independent directors (the “Special Committee”), and in
consultation with its outside legal counsel and financial advisors,
unanimously determined that the Revised Unsolicited Proposal was an
Acquisition Proposal (as defined in the Arrangement Agreement) that
could reasonably be expected to constitute or lead to a Superior
Proposal (as defined in the Arrangement Agreement). As required by
the Arrangement Agreement, Nordion notified Sterigenics of this
determination and, further to this notification, Nordion and
Sterigenics discussed possible amendments to the Arrangement
Agreement, which ultimately resulted in Nordion and Sterigenics
entering into the Second Amendment. As a result, the Board
determined, acting on the unanimous recommendation of the Special
Committee, that the Revised Unsolicited Proposal was no longer an
Acquisition Proposal that could reasonably be expected to
constitute or lead to a Superior Proposal.
The Arrangement is now valued at approximately US$805 million
and will be funded using a combination of new debt facilities and
equity financing, both of which are fully committed, Sterigenics’
cash on hand and a portion of Nordion’s cash on hand. Sterigenics
has delivered an amended and restated equity commitment letter
supporting the Increased Consideration. The Increased Consideration
represents:
- a premium of approximately 24.0% to the
closing price of US$10.48 per share on the NYSE on March 27, 2014,
the day immediately before the initial announcement concerning the
Arrangement;
- a premium of approximately 37.2% over
the 90-day volume weighted average price of US$9.47 per share on
the NYSE as at March 27, 2014;
- a premium of approximately 103.4% to
the closing price of US$6.39 per share on the NYSE on January 25,
2013, the last trading day immediately before the announcement of
the strategic review process;
- a cash adjusted premium to the 90-day
volume weighted average price on the NYSE of approximately 86.0% as
at March 27, 2014, adjusting for the Company’s fiscal Q2 2014
reported cash and cash equivalents balance of US$332.7 million or
US$5.37 per share; and
- a premium of approximately 6.1% over
the cash consideration of US$12.25 per share that was to be
received by shareholders under the Arrangement Agreement prior to
this increase.
The Board, acting on the unanimous recommendation of the Special
Committee, has unanimously determined that the Arrangement, as
amended by the Second Amendment, is in the best interests of
Nordion. The Board unanimously approved the Second Amendment and
re-affirmed its recommendation that shareholders vote FOR the
Arrangement at the Annual and Special Meeting of Shareholders
(the “Meeting”) and approved the postponement of the Meeting
to Friday, June 6, 2014 to provide shareholders with the
opportunity to either cast their vote if they have not done so
already or reconsider their position.
Second Quarter Financial ResultsThe Company has released
today its MD&A for the three and six months ended April 30,
2014, and its unaudited consolidated financial statements and
related note disclosures for the same period. 2014 fiscal year
financial outlook remains as previously announced on April 24,
2014. The MD&A and financial results are available under
Nordion’s profile on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar.
Second Amendment DetailsIn consideration of the increased
price per share agreed to by Sterigenics pursuant to the Second
Amendment, Nordion has agreed to increase the termination fee
payable to Sterigenics in certain circumstances, which includes if
the Company terminates the Arrangement Agreement to accept a
Superior Proposal approved by the Board and, subject to the terms
of the Arrangement Agreement, if the Arrangement is not approved by
shareholders at the Meeting and Nordion later consummates an
Acquisition Proposal made or announced before termination of the
Arrangement, from US$12 million to US$38 million. Further, Nordion
has agreed that the expense reimbursement of up to a limit of US$3
million payable to Sterigenics in certain circumstances pursuant to
the Arrangement Agreement, also be payable if the Arrangement
Agreement is terminated by either Nordion or Sterigenics or if the
Arrangement is not approved by shareholders at the Meeting. The
Second Amendment and amended Plan of Arrangement are available
under Nordion’s profile on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov/edgar.
The Arrangement continues to be subject to the same closing
conditions as previously disclosed to shareholders in the Circular,
including the approval of 66 2/3% of the votes cast by shareholders
present in person or by proxy at the Meeting, receipt of all
regulatory approvals, such as under competition/antitrust laws and
the Investment Canada Act, and the coming into force of certain
amendments to the Nordion and Theratronics Divestiture
Authorization Act, as more fully described in the Circular. In
addition, the Arrangement is effectively conditional upon Nordion
having at closing US$300 million of available cash on hand to
complete the steps of the transaction. As of the date hereof,
Nordion has approximately US$343 million of cash and cash
equivalents. The Arrangement is not subject to any financing
condition and is expected to close in the second half of calendar
2014.
Voting InformationThe Meeting will now be held at 12:00
pm ET on Friday, June 6, 2014. The location of the Meeting in
Ottawa will be subsequently confirmed by news release. Shareholders
present in person or by proxy at the Meeting will vote on the
resolution approving the Arrangement and on the annual meeting
matters.
Your vote is important regardless of the number of shares you
hold and the Board urges you to vote. As a result of the
postponement of the Meeting, the deadline for proxies to be
received by Nordion’s transfer agent, CST Trust Company, is now
5:00 pm ET on Wednesday, June 4, 2014. You are entitled
to vote at the Meeting if you were a shareholder on April 24,
2014.
If you have already submitted your proxy and you do not wish to
change your votes on the matters set forth therein, no further
action is required on your part and your votes will be counted at
the Meeting in accordance with the proxy you have already
submitted. If you have already submitted your proxy and you wish to
change how your proxy was voted, you must comply with the proxy
revocation procedures set forth in the proxy and in the Circular,
as supplemented on May 8, 2014. The Circular, as supplemented,
contains important information about the transaction and the
Meeting and is available under Nordion’s profile on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov/edgar.
Nordion is preparing a second supplement (the “Second
Supplement”) to the Circular which will describe the Second
Amendment and contain other relevant information. The Second
Supplement will not be mailed to shareholders but is expected to be
made available on or about June 2, 2014 under Nordion’s profile on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar. A copy of
the opinion received by the Board regarding the Increased
Consideration payable in the transaction from a financial
perspective will also be included in the Supplement. An amended and
restated letter of transmittal reflecting the Increased
Consideration will also be made available under Nordion’s profile
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.
Canadian Shareholders who require assistance in voting their
proxies may direct their inquiries to Nordion’s proxy solicitation
agent for Canada, CST Phoenix Advisors, by toll-free telephone in
North America at 1-800-332-4904 or at 1-201-806-2222 outside of
North America.
U.S. Shareholders who require assistance in voting their proxies
may direct their inquiries to Nordion’s proxy solicitation agent
for the U.S., Innisfree M&A Incorporated, by toll-free
telephone in North America at 1-888-750-5834, or collect at
1-212-750-5833.
Potential Impact of the Arrangement Not Being Approved by
ShareholdersThe Arrangement is the best alternative resulting
from an active and extensive strategic review process that was
publicly announced on January 28, 2013. The nature and duration of
the strategic review process has afforded interested parties
sufficient time to participate and, following the announcement of
the Arrangement Agreement on March 28, 2014 and the first amendment
to the Arrangement Agreement announced on May 5, 2014, to
submit or propose a Superior Proposal prior to the Meeting. Despite
this, no Acquisition Proposal has been received by Nordion other
than from Party A and the Revised Unsolicited Proposal was only
received on May 30, 2014, four days before the date to which the
Meeting had been postponed and 35 days after the Initial
Unsolicited Proposal was received. The Revised Unsolicited Proposal
does not include any greater commitment as to debt financing than
the Initial Unsolicited Proposal, and continues to require an
equity capital raise and approval of shareholders of Party A.
If the Arrangement is not approved by shareholders, either
Nordion or Sterigenics may terminate the arrangement agreement at
its option. If the Arrangement is not completed, the market price
of the shares may be materially adversely affected and there can be
no assurance that Nordion will be able to find a party willing to
pay a price per share at least equal to the price to be paid
pursuant to the terms of the Arrangement. In addition, the
Arrangement Agreement provides that if an acquisition proposal is
made or announced prior to the Meeting and this acquisition
proposal is later consummated after a negative vote of shareholders
with respect to the Arrangement, Nordion will be obligated, in
specified circumstances, to pay the termination fee of US$38
million to Sterigenics.
About Nordion Inc.Nordion Inc. (TSX:NDN) (NYSE:NDZ) is a
global health science company that provides market-leading products
used for the prevention, diagnosis and treatment of disease. We are
a leading provider of medical isotopes and sterilization
technologies that benefit the lives of millions of people in more
than 40 countries around the world. Our products are used daily by
pharmaceutical and biotechnology companies, medical-device
manufacturers, hospitals, clinics and research laboratories.
Nordion has over 400 highly skilled employees in three locations.
Find out more at www.nordion.com and follow us at
twitter.com/NordionInc.
About SterigenicsHeadquartered in Deerfield, Illinois,
Sterigenics operates out of 40 facilities across the Americas,
Europe and Asia and is a global leader in outsourced contract
sterilization services, primarily to the medical device,
pharmaceutical, food safety and high performance/specialty
materials industries.
AdvisorsJefferies LLC and Canaccord Genuity Corp. are
acting as financial advisors to Nordion in connection with the
transaction. Stikeman Elliott LLP and Skadden, Arps, Slate, Meagher
& Flom LLP are Nordion’s legal counsels and Davies, Ward,
Phillips & Vineberg LLP is the Special Committee’s legal
counsel. Goldman, Sachs & Co. served as financial advisor to
Sterigenics in connection with the transaction, and Gowling Lafleur
Henderson LLP, Kirkland & Ellis LLP and Cleary Gottlieb Steen
& Hamilton LLP served as legal counsel.
Caution Concerning Forward-Looking StatementsThis release
contains forward-looking statements, within the meaning of certain
securities laws, including under applicable Canadian securities
laws and the “safe harbour” provisions of the United States Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, but are not limited to, statements relating to
our expectations with respect to: the timing and outcome of the
proposed acquisition by Sterigenics of all of the outstanding
common shares of Nordion; the anticipated benefits of the
transaction to the parties and their respective security holders;
the timing and anticipated receipt of required regulatory, court
and security holder approvals for the transaction; the timing and
anticipated enactment of Nordion and Theratronics Divestiture
Authorization Act; Sterigenics’ ability to complete its financing;
the ability of the parties to satisfy the other conditions to, and
to complete, the transaction; the anticipated timing of the meeting
of Nordion shareholders to consider the transaction and for the
closing of the transaction; and more generally statements with
respect to our beliefs, plans, objectives, expectations,
anticipations, estimates and intentions. The words “may”, “will”,
“could”, “should”, “would”, “outlook”, “believe”, “plan”,
“anticipate”, “estimate”, “project”, “expect”, “intend”,
“indicate”, “forecast”, “objective”, “optimistic”, and similar
words and expressions are also intended to identify forward-looking
statements. In respect of the forward-looking statements and
information concerning the anticipated benefits and completion of
the proposed transaction and the anticipated timing for the
completion of the transaction, Nordion and Sterigenics have
provided such statements and information in reliance on certain
assumptions that they believe are reasonable at this time,
including assumptions as to the time required to prepare and mail
security holder meeting materials; the ability of the parties to
receive, in a timely manner and on satisfactory terms, the
necessary regulatory, court and shareholder approvals; the timing
and anticipated enactment of the proposed amendments to the Nordion
and Theratronics Divestiture Authorization Act; the ability of the
parties to satisfy, in a timely manner, the other conditions of the
closing of the transaction; and other assumptions and expectations
concerning the transaction. There can be no assurance that the
proposed transaction will occur, or that it will occur on the terms
and conditions contemplated in this news release. The proposed
transaction could be modified, restructured or terminated.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news
release.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially
from those currently anticipated due to a number of factors and
risks. Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on other factors that could
affect the operations or financial results of the parties are
included in reports on file with applicable securities regulatory
authorities, including in our 2013 Annual Information Form (AIF)
and our 2014 Management Information Circular. Our 2013 AIF, 2014
Management Information Circular, and our other filings with the
Canadian provincial securities commissions and the US Securities
and Exchange Commission are available on SEDAR at www.sedar.com, on
EDGAR at www.sec.gov, and on Nordion’s website at
www.nordion.com.
The forward-looking statements contained in this news release
are made as of the date of this release and, accordingly, are
subject to change after such date. The Company does not assume any
obligation to update or revise any forward-looking statements,
whether written or oral, that may be made from time to time by us
or on our behalf, except as required by applicable law.
NordionMEDIA:Shelley Maclean, 613-592-3400 x
2414Shelley.Maclean@nordion.comorINVESTORS:Ana Raman,
613,595-4580investor.relations@nordion.com
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